Rentokil Initial's loss-making City Link business will fail to deliver a profit by the year end.
In a third-quarter update, Rentokil Initial Chief Executive Officer, Alan Brown said: "Challenging conditions across Europe, including the UK, have limited group revenue growth in the third quarter. Outside Europe our businesses are considerably more buoyant."
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For the third quarter ended September 30th revenues rose 1.6% to £626.7m with pre-tax profits up 0.8% at £36.3m. For the nine months, revenues were almost flat at £1.88bn although pre-tax profits rose 26.2% to £82.9m.
It has made cost savings of £37.2m for the year to date and expects to exceed its £50m target for 2012.
Operating cash flow of £44.6m was £10.9m lower than for the third quarter in 2011 primarily due to the phasing of working capital. Net debt at September 30th was £943.2m.
CM
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